Wednesday, September 9, 2015

SPY Short 9-9-15

If you took a short position in SPY over the last 1-2 days based upon information from the blog here, please comment below with entry price and any questions in regards to trade management.

With the bearish engulfing pattern today, it seems likely that today's high should hold in the short term for an established short position.

I  would guess that we are headed to retest the August low from here.  From past comparisons I still am not convinced that price is ready to break the low and hold.  If I had to choose here, I would suggest a scaled exit strategy taking one part of the position off at a modest profit, rather than hold the whole part expected sustained weakness.

I will update as the action unfolds and any bottom reversals occur (assuming price does decline from here of course.



  1. Hi Pete, based on your comments from yesterday and the day before yesterday I took a short position on DJ30 at 16 481 and made 200 points for the day. My stop was very tight so it was hit this night but I will look for another entry.

  2. OK good. Do you have a trailing stop order type possible with your account/broker?

    I still favor the downside as long as prices close below Wednesday's high which was a bearish engulfing candlestick.

    Trade stats on this set-up were basically maximum negative at 7-8 days out from the set-up. That would be next Wednesday and Thursday. And the average WINNER on this set-up was ~5% for the short trade. So given those stats we still have some room to decline in both price and time before we may expect the market to rebound substantially.

    That is my best opinion here in any case.

    1. Hi Pete,

      The stop was hit but I entered again with a short position on DJ30. Currently the effect is negative due to yesterdays positive movement of the indices but I expect decline today due to Friday's usual positions closing. What about the next week uncertainty around the interest rates FED decision ? Do you have an opinion?

  3. OK. See the most recent post. As long as Wednesday's high is not exceeded things seem set to continue a general decline from my perspective.